Israel Faces $10 Billion Gap in Open Orders as U.S. Weighs Aid Phaseout
Israel has ordered billions in military equipment beyond U.S.-funded commitments, complicating President Trump's proposal to phase out direct defense aid and shift toward joint manufacturing.
Israel has ordered billions of dollars in military equipment from the United States beyond what Washington has committed to fund, highlighting the complex financial hurdles facing any winding down of American aid, according to a State Department document sent to Congress. While the U.S. has pledged nearly $7 billion in military assistance for the next two years, Israel will need roughly $10 billion more after 2028 to cover open orders placed by April 1.
President Donald Trump announced this week that he intends to end direct military aid to Israel, a proposal that surprised officials in Jerusalem, including senior defense figures. The shift comes as US-Israel relations and the ongoing conflicts in the region emerged as central issues in U.S. elections, where Republicans suffered significant defeats. Vice President JD Vance noted on social media that voters pushed back against the administration's foreign policy stances, while Trump argued that halting direct aid would neutralize a key political argument used by Democratic critics.
Under current agreements, Israel receives $3.3 billion annually through Foreign Military Financing (FMF), a mechanism that allows Jerusalem to procure advanced American weaponry including fighter jets and munitions. In addition to the regular funding, Congress approved roughly $26 billion in supplemental aid following the outbreak of the Gaza war in October 2023. State Department correspondence indicates that the $10 billion in outstanding orders beyond 2028 will require a decision on whether Washington or Jerusalem will foot the bill.
Lawmakers are simultaneously drafting provisions for the National Defense Authorization Act (NDAA) to transition traditional foreign military aid into joint defense manufacturing investments. Supporters argue this will institutionalize bilateral technological cooperation, similar to past joint ventures like the Iron Dome missile defense system, while critics warn it would further entrench Israel in Pentagon supply chains and complicate future legislative cuts.
Transitioning away from the decades-old assistance model poses severe logistical and financial challenges. Israel currently allocates roughly 7 percent of its GDP to defense—surpassing all NATO members—and absorbing the full cost of advanced acquisitions like F-35 fighter jets could strain the national budget. Former and current U.S. officials emphasize that an abrupt termination of military assistance remains practically unlikely given existing legal obligations and multi-year procurement pipelines.
